We have integrated ESG factors into our investment processes, stewardship practices and into the management of our own company in a manner that is consistent with our investment strategy, the interests of our clients and stakeholders and the principles set out in CRISA and UNPRI.Subject to the mandate, Sesfikile Capital will not explicitly screen out or exclude any companies due to ESG factors. The only exception would be where there are concerns around a significant lack of corporate governance in a potential investee company and where, in Sesfikile Capital’s view, it is unlikely that we would be able to influence management of the potential investee company to improve their corporate governance. For all other ESG factors, Sesfikile Capital includes these in the rating and valuation of the relevant investment, rather than assigning a specific ranking for companies comparing their ESG merit.
All investment team members are aware that ESG factors must be considered in the valuation process and are therefore responsible for ensuring that the ESG considerations relevant to a particular company are included in their long-term valuation of a company. As Sesfikile Capital rigorously applies our investment methodology of capitalising forward distributable earnings by a fair exit yield, ESG is incorporated into our exit yield and hence will be implicit in every investment decision that Sesfikile Capital makes.